What is an RRSP?

Many Canadians have an RRSP account through their financial institution. This is different from a regular account because it lets you save money for your retirement and lowers your income taxes.

When you put money into your RRSP, you can deduct that amount from your taxable income for that year. You don't pay tax on the money you put into an RRSP account, or any interest you earn on it, until you take the money out.

RRSPs help you save for the long-term, but in an emergency you can take out the money. The Home Buyers' Plan (HBP) lets you take money out of your RRSP, without paying taxes on it, in order to buy a home. The Lifelong Learning Plan (LLP) also lets you take out money if you or your partner are participating in full-time education or training.

Getting started with an RRSP as early as you can is important. This is particularly important for newcomers, since you may be starting this investment later than others.

Who is eligible for an RRSP?

You are eligible to open an RRSP if you:

Are a Canadian resident for tax purposes* and file income taxes in Canada;